What Form 1139 (2019) Is For
IRS Form 1139 (2019) helps corporations quickly recover income tax that was previously paid when taxable income changes because of losses, credits, or other deductions. This form allows businesses to carry back a net operating loss or unused business credit to earlier tax years, enabling them to claim a refund. It provides companies with faster access to funds that can support their operations, employees, and future investments.
Corporations use this form instead of filing an amended return, which usually takes longer to process. The IRS generally issues payments within ninety days through direct deposit to a verified bank account or by paper check. This form applies to corporations only and not to small businesses, partnerships, or individual taxpayers. Companies should visit IRS.gov to confirm that the instructions are current and that the website shows the locked padlock icon for secure access.
When You’d Use Form 1139
Corporations use this form when they need to request a refund for taxes paid in prior years, typically after their business income decreases. For example, a company that reports a significant loss in 2019 can carry that loss back to earlier tax years when it had profits and recover part of the income tax it paid in those years. This refund can help reduce costs and improve cash flow.
For the 2019 tax year, the CARES Act introduced special rules that allowed a five-year carryback for losses, providing a significant advantage over the previous two-year rule. A corporation must file the form within twelve months after the loss year’s end. If the deadline passes, the company may still request a refund by filing an amended return, such as Form 1120X.
Key Rules or Details for 2019
The 2019 version of Form 1139 included defined limits and special rules that affected taxable income and carrybacks. Losses from 2019 could be applied to income earned in earlier tax years, starting with the oldest year first. A corporation could elect to waive this carryback period if it preferred to use the loss for future years.
When an exception applies, such as a Section 965 inclusion year involving foreign profits, the IRS requires corporations to follow specific law and filing rules. All deductions, depreciation, wages, and dividends must be recalculated to the extent they affect taxable income. Businesses must ensure that every tax return, expense, and credit line is accurate before filing. The "Last Reviewed or Updated" notice on IRS.gov helps taxpayers confirm that they are using current guidance.
Learn more about federal tax filing through our IRS Form Help Center.
Step-by-Step (High Level)
Step 1: File the Original Tax Return First.
A corporation must file its income tax return, such as Form 1120, before submitting Form 1139. The IRS uses this return to verify that the claimed loss or credit exists.
Step 2: Gather Documentation.
A corporation should collect copies of the relevant tax returns, schedules showing losses or credits, and any election statements required by law. It must also provide accurate account and financial institution details for the refund payment.
Step 3: Complete Form 1139.
The company must provide identifying information, specify which items are being carried back, and calculate the revised taxable income for each prior year. Calculations must include adjustments for deductions, depreciation, wages, and dividends.
Step 4: Attach Required Forms and Statements.
Each refund claim must include supporting documentation, such as schedules for net operating losses, capital losses, or general business credits. Any amendments or elections must be clearly stated.
Step 5: Mail to the Appropriate IRS Service Center.
Corporations must send the completed form to the address listed in the IRS instructions. The submission should be signed, dated, and mailed securely. If using online resources, the filer should confirm that the official IRS website shows the locked padlock icon before downloading forms.
Step 6: Wait for Processing.
The IRS generally processes Form 1139 within ninety days of receiving a complete and accurate application. Refunds are paid by direct deposit or paper check, depending on the payment option chosen.
Common Mistakes and How to Avoid Them
- A corporation may file Form 1139 before submitting its original income tax return. The IRS will reject an application that lacks a filed return for the lost year. The company should always file both forms together or in the proper order.
- Missing attachments or incomplete forms delay processing. Every schedule that supports deductions, credits, or expenses must be included.
- Mailing to the wrong IRS address can cause significant delays. Filers should verify their current addresses on the IRS website before submitting their returns.
- Forgetting to elect the waiver of the carryback period, if desired, can prevent the corporation from applying losses to future years. Decisions should be documented on the original return.
- Omitting signatures or dates renders the submission invalid. Authorized officers must sign the form before it is mailed.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
After Form 1139 is filed, the IRS checks the accuracy of all information, including income, deductions, and payments. If everything is correct, the tentative refund will be issued by direct deposit or paper check, generally within 90 days.
The refund is considered temporary until the IRS completes its full review. If later adjustments are needed, the IRS may request repayment or add interest. Corporations should retain all records, forms, and proof of payment for a minimum of three years to meet the IRS's record-keeping requirements.
FAQs
Can corporations file IRS Form 1139 (2019) electronically?
Corporations cannot file IRS Form 1139 (2019) electronically. The form must be printed, signed, and mailed to the IRS. Taxpayers should visit the official IRS website and verify the presence of a locked padlock icon to ensure a secure submission.
How long does the IRS take to issue a refund?
The IRS generally issues payments within ninety days after receiving a complete and accurate tax return. Refunds are paid by direct deposit to a verified bank account or by paper check sent to the corporation’s mailing address.
Can small businesses use Form 1139 to recover prior taxes?
Form 1139 applies only to corporations and not to small businesses, partnerships, or individual taxpayers. Businesses that are not taxed as corporations must file an amended return or follow other IRS refund rules defined by law.
What happens if an exception applies to a section 965 tax year?
When an exception applies to a section 965 inclusion year, corporations must follow special rules or file an amended return. The IRS provides detailed guidance to ensure taxable income, deductions, and credits are correctly adjusted.
How does Form 1139 handle business income and taxable deductions?
Corporations must report business income, expenses, and deductions accurately. The IRS requires adjustments to taxable income, including depreciation, wages, dividends, and other items, to the extent allowed under tax law and regulations for each tax year.
What should corporations do if errors are found after filing?
If errors are discovered after Form 1139 is filed, the corporation may submit an amended version marked “Amended” or “Superseding.” The IRS reviews the corrected form to determine if additional taxes, credits, or limitations apply.
